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Citation: Iosifidis, P. (2016). Media Ownership and Concentration in the United Kingdom. In: Noam, E. (Ed.), Who Owns the World's Media?: Media Concentration and Ownership around the World. (pp. 425-452). Oxford: OUP. ISBN 9780199987238
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Permanent repository link: https://openaccess.city.ac.uk/id/eprint/6036/
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Media Ownership and Concentration in the United Kingdom
Petros Iosifidis
INTRODUCTION Excessive media concentration in the United Kingdom is a public concern since it can endan- At a time when media companies are becoming ger media pluralism and diversity. For these major actors in international commerce, and reasons the United Kingdom has introduced when cable, satellite, and digital platforms are media ownership rules to preserve economic increasingly globalizing media markets, ques- goals (open competition) and social aims (plu- tions about the possible effects of media concen- ralism and diversity). Media regulation in the tration on the traditional role of the media have United Kingdom is governed by the provisions increasingly come to the fore. of the Communications Act (2003), which In the United Kingdom, concentration of mostly applies to electronic media, and the media ownership is a market reality, as evidenced Enterprise Act (2002), which applies to newspa- by the reduction of the number of companies in pers. The Office of Communications (Ofcom), several traditional media sectors, such as print and the new super-regulatory agency set up in 2003 broadcasting, and the growing number of media to replace five existing regulatory bodies—the firms that are owned by the same parent company. Independent Television Commission, the Radio The intensification of concentration can also be Authority, the Office of Telecommunications, viewed as a lever to promote market liberaliza- the Broadcasting Standards Commission, and tion that would nurture national champions. Both the Radiocommunications Agency—is respon- “New Labor” governments (1997–2010) and the sible for enforcing this legislation. subsequent Conservative-Liberal Democrat coa- British media ownership rules are sector spe- lition government have promoted liberalization. cific: the main objectives for establishing media
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ownership rules for newspapers, radio, and tele- support from several major players.1 This sub- vision broadcasting have been to protect plural- stantial liberalization and reduction of cross- ity of viewpoints and provide citizens access to a media ownership rules has been accompanied wide range of sources of news and information. by an increased dependence on competition law, The media ownership rules are separate from as well as the extension of self-regulation wher- the merger regime, which applies to all sectors of ever possible. the economy, including media markets. The pri- In the United Kingdom, media ownership mary purpose of the merger regime is to retain is a subject of much political controversy— and enhance competition, but it may indirectly particularly when it involves media magnate protect plurality by preventing consolidation in a Rupert Murdoch, whose News Corporation has particular market on competition grounds. The significant market shares in the US, UK, and media public interest test, introduced in 2006, Australian media markets (and in others as well). allows the Secretary of State for Business, Inno- The issue of one entity controlling such a large vation, and Skills to intervene in newspapers, proportion of the United Kingdom’s newspapers broadcasting, and cross-media mergers if they and broadcasting interests is an area of public raise public interest concerns. The UK regula- concern—particularly when the owner(s) has tory regime for communications law and policy a close interest in the political agenda of these is also determined by EU legislation. Examples newspapers.2 In the 1980s, the Thatcher govern- include the laws governing the liberalization of ment allowed News International to take over UK media and communications law and policy The Times and Sunday Times without referring (see below), a process strongly influenced by EU it to the Monopolies and Mergers Commission provisions that increasingly foreground compe- (MMC), even though the company already con- tition law as a means of promoting pluralism. trolled The Sun and the (now-defunct) News of The Communications Act (2003) freed up the World. After its defeat in the 1992 elections, the communications industry far more than was the Labor Party realized that it was vital to have expected, removing most of the ownership regu- Murdoch on board. Murdoch’s papers, of course, lations that characterized British broadcasting, realized this as well: The Sun heralded its role as it was thought these deprived companies of in the Conservative John Major’s 1992 victory the economies of scale and scope required to with the headline “It’s The Sun Wot Won It.” expand into foreign markets. Rules preventing An example of the allegedly close relationship the joint ownership of television and radio sta- between Murdoch and former Prime Minister tions were removed; Rupert Murdoch’s News Tony Blair was the former’s phone call in 1998 to International, the UK newspapers arm of News the Prime Minister enquiring about prospects Corporation, was allowed to expand into tele- for further developing News International’s vision broadcasting; and non-European own- interests in the United Kingdom. Despite this, ership of broadcasting assets was permitted, when Murdoch broadcasting giant British Sky effectively clearing the field for takeovers by Broadcasting (BSkyB) obtained a 17.9% stake international firms. The decisions to permit the in the terrestrial broadcaster ITV in 2008, the acquisition of Five by print publishers and to lift Blair government and the Court of Appeal made the ban on non-European ownership were par- BSkyB reduce that to a 7.5% stake; BSkyB had to ticularly controversial, though these provisions sell off the difference at a loss. proved the Blair government’s free market cre- In recent years, emerging issues have been dentials to media owners and received strong framed in terms of competition considerations.
1. Freedman, Des. The Politics of Media Policy. Cambridge: Polity Press, 2008, 119–120; and Tunstall, Jeremy. “The BBC and UK Public Service Broadcasting.” Reinventing Public Service Communication: European Broadcasters and Beyond. Iosifidis, Petros, ed. Basingstoke: Palgrave Macmillan, 2010, 145–157. 2. Douglas, Torin. “Analysis: Murdoch and Media Ownership in UK.” Dec. 23, 2010. July 2, 2012.
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One such case in 2011 was the proposed acqui- regarding its expansionist strategies have sition by News International, a subsidiary of been partly addressed with the suggestion by News Corporation, of the remaining 61% of the Conservative-Liberal Democrats coalition satellite broadcasting networks in the United government to reduce BBC Online’s budget by Kingdom that BSkyB did not already own. The 25% and to freeze BBC license fee income until proposal prompted an unprecedented response 2017. However, there are voices that argue that from nearly all non-News International owned any cut to the BBC license fee raises fundamen- companies in the United Kingdom, both private tal questions about the BBC’s independence and public. The companies wrote a letter asking from the government.4 the UK Business Secretary to refer the case to Ofcom on the basis that the takeover would PRINT MEDIA have “serious and far-reaching consequences 3 for media plurality.” In the United Kingdom, Newspapers News International already owns about 34% of the newspaper market, and with the BSkyB There are five national daily “quality” titles— deal, it would have controlled two-thirds of pay The Guardian, The Independent, The Financial television. Eventually, in July 2011 the US$16 Times, The Times, and The Daily Telegraph— billion (£10 billion) BSkyB bid was abandoned each owned by a different newspapers group. in the light of the phone hacking scandal— In addition, there are two national daily “mid- “Hackgate”—at the Murdoch tabloid News of market” titles, the Daily Mail and the Daily the World. Employees of News of the World and Express. Then come the three national daily several other UK papers under the News Inter- “tabloids”: The Sun, the Daily Mirror, and the national banner have been accused of engaging Daily Star. The Sun belongs to the same group in phone hacking, police bribery, and exercis- that owns The Times, News International. ing improper influence in the pursuit of stories. Finally are the 10 Sunday titles—Sunday Mirror, Given that News International also owns a 7.5% The People, Sunday Mail, Daily Star Sunday, Mail stake of the main commercial terrestrial broad- on Sunday, Sunday Express, The Sunday Times, caster ITV plc, this acquisition would have The Sunday Telegraph, The Observer, and The raised competition concerns as well as concerns Independent on Sunday. The Sunday editions regarding media pluralism in the UK media. follow their eponymous daily papers. It is also striking how current debates in the News International is controlled by News field of broadcasting are focused more than Corporation, which is controlled by the Mur- ever on the publicly funded British Broadcast- doch family and publishes The Sun, The Times, ing Corporation (BBC) and its expanding and The Sunday Times. As already noted, its pol- online and digital activities at a time of eco- itics are regarded as being fairly conservative. nomic difficulties faced by its competitors. With News Corporation split in 2012 into two sepa- its strong presence in radio, terrestrial TV, rable publicly listed companies—one for news- magazines, and digital and online domains, papers, book publishing, and education (News industrialists, some politicians, and academ- International); and the other for audiovisual ics have strongly criticized the BBC’s business media and entertainment programming (21st practices. Its rival, BSkyB, has run a persistent Century Fox). The restructure was expected to campaign calling for the government to shrink protect the group’s robust film and television the scope of public broadcasting. Concerns assets from the publishing businesses, which
3. Browning, Jonathan. “U.K. Newspapers Join BBC in Opposition to Murdoch BSkyB Deal.” Bloomberg, Oct. 12, 2010.
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were undervalued after the phone-hacking scan- newspapers. The O’Reilly family has a con- dal’s rising legal costs. Given that Rupert Mur- trolling stake of 28.2% in the group, with Irish doch, chairman and chief executive of News entrepreneur Dennis O’Brien owning the largest Corp, has served as the chairman of both com- stake after that, of 22.5%. Through his company, panies, control still essentially remains in the Communicorp, O’Brien also owns two national same hands. radio channels, Newstalk and Today FM, plus 40 Telegraph Media Group is owned by the Brit- other stations in the EU. In addition, Independ- ish businessmen Sir David Rowat Barclay and ent News and Media owns the Belfast Telegraph Sir Frederick Hugh Barclay, who acquired the Group, which publishes the Belfast Telegraph, business in 2004 for US$1.2 billion (£665 mil- Ireland’s Saturday Night, Sunday Life, and Ads for lion). It prints The Daily Telegraph, The Sunday Free. These newspapers are regarded as offering Telegraph, the weekly magazine The Spectator, independent political coverage. Until 2010, the The Scotsman (plus its Sunday edition, Scotland company published the UK titles The Independent on Sunday), and the Edinburgh Evening News. and The Independent on Sunday, but both newspa- Telegraph offerings are regarded as offering pers were sold to Alexander Lebedev. independent political coverage, though they Trinity Mirror plc (managed by business- have historically leaned toward the Conserva- woman Sly Bailey) is the result of the takeover tive Party. of Mirror Group Newspapers by Trinity plc The Daily Mail and General Trust is owned in September 1999. It owns the Daily Mirror, by the British media conglomerate Daily Mail Sunday Mirror, The People, Daily Record, and and General Trust plc and prints The Daily Mail, the Sunday Mail—in addition to around 120 Mail on Sunday, Ireland on Sunday, Mail Today other (regional) tabloids that run either daily or (a joint venture with the Indian media con- weekly editions. glomerate Living Media), and several special- Pearson plc, helmed by Dennis Stevenson, is ized dailies such as the national urban market a relatively new entry to the UK media market, daily Metro, the classified directory Loot, and having only gotten into the newspaper business the London Lite “free sheet.” Until January in the 1920s. Since the 1990s, it has transformed 2009, the group also owned the dominant paid- itself from its roots as an industrial holding com- subscription London metro daily Evening pany to a major publisher of educational materi- Standard, but sold the paper to the Russian als and news with three major business groups: billionaire Alexander Lebedev. Most of the titles Pearson Education, the Penguin Group, and the owned by the group are tabloid newspapers that Financial Times Group, which publishes the focus on “light news,” celebrity lifestyles, and Financial Times in the global English-language some limited political reporting. market, Les Echos in France, and Expansion Guardian Media Group (GMG), which is in Spain. It also owns 50% of The Economist wholly owned by the limited company Scott Group (publisher of The Economist), plus a host Trust, owns The Guardian and The Observer; of personal finance magazines. Manchester Evening News (a regional news- Finally, Northern & Shell Network is owned paper); Channel M (a regional TV station); by Richard Desmond and publishes the Daily numerous regional radio stations across the Express, Sunday Express, and the Daily Star. It also United Kingdom under the Real Radio, Smooth owns the magazines New! and Star (Table 16.1). Radio, and Rock Radio brands; and Bauer Radio, The UK national daily newspapers market a division of the leading international magazine is highly concentrated. News International is a publishing company Bauer. The political per- clear market leader and has managed to gain and spective of GMG’s newspapers is regarded as retain very high market shares. In 2009, News left leaning. International’s market share of daily newspa- Independent News and Media’s main news- pers was more than double compared to that papers are the Irish Independent and the Sunday of Trinity Mirror plc’s, the second biggest UK Independent, which are Ireland’s best-selling media group.
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Table 16-1. Daily Newspaper (Market Shares by Circulation) 1997–2012
1997 2001 2002 2008 2009 2012
News International (News Corp., 34.4 31.8 32.2 34.8 33.8 32.5 Murdoch Family, US/AUS) The Sun 29.7 26.6 27.3 29.2 28.1 28 The Times 4.7 5.2 4.9 5.6 5.7 4.5 Trinity Mirror plc 23.9 21.0 20.2 15.6 16.2 15.1 Daily Mirror 18.3 16.4 16.1 12.4 12.9 12 Daily Record 5.6 4.6 4.1 3.2 3.3 3.1 Northern & Shell (Richard Desmond) 14.3 12.5 13.8 14.9 13.5 13 Daily Star 4.9 5.6 6.5 8.1 6.9 6.7 Daily Express 9.4 6.9 7.3 6.8 6.9 6.3 Daily Mail & General Trust (Daily Mail) 13.6 18.7 18.5 21.2 19.9 21.5 Telegraph Group (Barclay Brothers, 7.7 7.7 7.3 7.4 7.3 6.4 Daily Telegraph) Pearson plc (Financial Times) 1.3 3.8 3.5 4.0 4.1 3.3 Guardian Media Group (Scott Trust, 2.7 3.1 3.0 3.0 3.3 2.4 The Guardian) Independent Print Ltd (Alexander 2.1 1.5 1.4 1.8 1.9 1.0 Lebedev, The Independent) Total Revenue (mil £)1 5,152 6,517 6,393 5,529 6,580 5,608 Total Revenue (mil US$) 8,450 9,385 9,590 10,283 10,330 8,887 C4 86.2 84 84.7 86.5 83.4 82.5 HHI 2,217 2,044 2,054 2,209 2,068 1,974 N (>1%) 8 8 8 8 8 8 Noam Index 784 723 726 781 731 698
Source: Audit Bureau of Circulations, 2010, 2012 http://www.abc.org.uk/. 1 This revenue figure is an estimate based on data collected in this study: it is based on average per capita revenues reported for several other countries in this study with similar per capita income.
The newspaper is in decline, though, as cir- the Daily Mirror, had about 3.5 million and 2 mil- culation has been falling steadily over the past lion readers, respectively, in 2002, this dropped four decades. In the period from 1965 to 2005, to 2.9 million and 1.3 million, respectively, in the cumulative loss of circulation of popular and 2009. In terms of revenues, for FY2008–2009 quality dailies was 29% and 31%, respectively, newspapers experienced the biggest reduction owing among other factors to the rise of televi- in advertising revenues among traditional media sion and the Internet. Since 2008, this has been ever, falling by more than 20%, TV advertising exacerbated by the global financial crisis. While revenues fell by 9%, and radio advertising rev- two of the best-selling newspapers, The Sun and enues by 15%.5
5. Ofcom. “International Communications Market Report 2010.” London: Office of Communications, Dec. 2, 2010. May 30, 2012.
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Book Publishing However, the future of book publishing faces a declining economy, a shrinking dis- The UK book publishing industry is dominated tribution network, and, above all, a decline in by four groups: Hachette, Random House, physical book sales. The main problem facing HarperCollins, and Penguin Books. In 2004, the book publishing industry is the uncertainty the market share of these four was greater than surrounding digital publishing. In fact, at the 50%, and although it has been declining slightly 2011 London Book Fair, a seminar debated the since then, the four still account for a considera- prompt “Authors and readers are all that matter. ble overall market share. In the last decade, the Publishers will soon be irrelevent.”6 In a similar top two—Hachette and Random House—lost vein of self-examination, The Bookseller maga- market shares. Penguin Books saw its market zine that year enquired whether publisher per- share rising from 10.5% to 11.7%, and Harper- formance based on Nielsen BookScan Total Collins began regaining market share in 2011 Consumer Market print figures is still a rel- after several years of decline. evant metric in today’s increasingly digitalized
Table 16-2. Book Publishing (Market Shares by Revenue) 2004–2011
2004 2008 2009 2010 2011
Hachette (Lagardère, France) 17.0 15.9 16.4 15.2 13.9 Random House (Bertelsmann AG, Germany) 15.5 14.8 13.7 13.8 13.2 Penguin Books (UK) 10.5 10 9.7 11.5 11.7 HarperCollins (News Corporation, 9.0 8.3 7.6 7.1 7.7 US/UK/AUS) The Independent Alliance1 (a) — 4.0 4.0 3.9 3.3 Pan Macmillan (Macmillan Group, 3.0 3.3 3.2 3.6 3.7 Holtzbrinck, Germany) Bloomsbury 2.5 2.4 2.2 2.1 2.3 Pearson 2.2 2.4 1.9 1.8 2.4 Oxford University Press 2.5 1.9 1.9 2.0 2.0 John Wiley 1.7 1.5 1.5 1.5 1.5 Simon & Schuster (Viacom, US) 1.4 1.5 1.8 1.8 2.0 Others 34.7 34.0 36.1 35.7 36.3 Total Revenue (mil £)2 3,348 4,268 3,718 3,748 3,817 Total Revenue (mil US$) 6,162 6,828 5,838 5,810 6,107 C4 52.0 49.0 47.4 47.6 46.5 HHI 752 687 652 649 610 N (>1%) 10 11 11 11 11 Noam Index 238 207 197 196 184
Source: Nielsen BookScan TCM 2005, 2009, 2010, 2011, 2012; The Bookseller: 2010, 2011. 1 TheIndependent Alliance, an association of 10 UK publishers, was formed in 2005 and its members are Atlantic Books, Conon- gate Books, Faber and Faber, Granta Books, Icon Books, Portobello Books, Profile Books, Quercus Publishing, Serpent’s Tail, and Short Books. 2 This revenue figure is an estimate based on data collected in this study: it is based on average per capita revenues reported for several other countries in this study with similar per capita income.
6. Reed, John. “Debate: Will Publishers Soon Be Irrelevant?” Publishing Talk, April 18, 2011. Dec. 20, 2012.
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market. The answer was a qualified yes: digital in the United States and continental Europe, sales in 2011 may have made up about 10% of the where subscription services are much more pop- market, perhaps up to 12% for some publishers, ular. Consumer magazines may be general titles but an overwhelming majority of the market is that aim to entertain and inform, or specialist still print-based (Table 16.2). titles aimed at a specific interest or hobby. There are about 2,800 UK consumer magazines.7 Magazine Publishing The biggest UK magazine publishers by sales revenue are Bauer (Germany), which in 2008 The United Kingdom has the world’s highest per took over the then second-largest group, EMAP; capita concentration of magazine titles. There IPC Media, owned by Time Inc., the magazine are more than 8,000 titles published in Britain, publishing subsidiary of Time Warner in the mostly out of London. Consumer magazines United States, which in 2001 acquired IPC make up the bulk of the titles for sale. Uniquely, Media for US$1.7 billion (£1.15 billion) in the most UK magazines for consumers—about 90% biggest magazine deal ever seen in the United of them—are sold through newsagents or super- Kingdom; Hearst Magazines UK, the product markets. This is a much higher proportion than of the US$651 million (£407 million) merger in
Table 16-3. Magazine Publishing (Market Shares by Revenue) 2004–2011
2004 2008 2011 Cir c ul at ion: 2 0 11 (mil copies)
Bauer (Germany) 18.0 20.0 26.0 5.8 IPC Media/Time Warner (US)1 20.0 22.0 20.0 5.7 Hearst Magazines UK 13.5 15.0 15.0 4.1 (US/France) BBC Magazines (Public) 11.5 10.0 9.5 3.0 Condé Nast (Advance 4.8 4.5 4.0 1.5 Publications, US) Egmont Group (Denmark) 2.5 2.5 2.5 0.6 Hubert Burda (Germany) 2.0 2.0 2.0 0.6 Haymarket Media Group (UK) 1.5 1.5 1.3 0.4 Other 26.2 22.5 19.7 – Total Revenue (mil £)2 3,315 3,711 4,506 Total Revenue (mil US$) 6,067 6,903 7,210 C4 63.0 67.0 70.5 HHI 1,074 1,242 1,419 N (>1%) 8 8 8 Noam Index 380 439 501
Source: Press Gazette Reporters, 2011. http://www.pressgazette.co.uk/magazine. 1 IPC Media/Time Warner includes IPC Inspire (leisure brands), IPC Connect (women’s weeklies), and IPC Southbank (up- market women’s division). 2 This revenue figure is an estimate based on data collected in this study: it is based on average per capita revenues reported for several other countries in this study with similar per capita income.
7. Magforum. n.d. “Magazine industry sectors.” May 22, 2012.
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2011 of the National Magazines Company with just 10% of the national market share, while the Hachette Filipacchi Médias, and BBC Maga- local/regional commercial broadcasters hold zines. In terms of circulation in 2011, Bauer 31% of it.8 was the market leader, selling 5.8 million copies While in 1996 the BBC and commercial radio with IPC Media/Time Warner a close second, had an almost equal market share of 50:50, in having sold 5.7 million copies. In the same year, more recent years, BBC radio stations have sur- Hearst Magazines UK sold about 4.1 million passed commercial radio: in 2011, BBC’s share copies, followed by BBC Magazines (2.95 mil- had risen to 54.5%. One reason is that the BBC lion), Condé Nast (1.54 million), Egmont UK national radio retains the best national FM fre- Publishing (610,000 copies), Hubert Burda quencies, while commercial radio’s FM frequen- (550,000 copies), and Haymarket (380,000 cies are predominantly local ones and as such copies). Foreign concerns own most UK con- have limited range. sumer titles. IPC Media and Condé Nast are Of the commercial groups, the most pop- owned by the US groups Time Warner and ular is Global Radio UK, the largest commer- Advance Publications, respectively. The larg- cial radio company in the country following est British-owned company is BBC Magazines the acquisitions of Chrysalis Radio and GCap (Table 16.3). Media in 2008. In June 2012, Total GMG Radio, the United Kingdom’s third-largest AUDIOVISUAL MEDIA radio group, reportedly signed a US$111 mil- lion (£70 million) deal with market leader Radio Global Radio UK, strengthening the market position of Global Radio and leaving Bauer The public BBC dominates the UK national Radio (owned by foreign interests) in a distant radio market, while a plethora of private com- second place. Table 16.4 does not take account mercial radio stations operate at the local and of this development, as at the time of writing regional levels. There are 40 local stations in a regulatory review into the deal was expected England, and two national services in Wales, to take place to clear it. GMG, owner of the Scotland, and Northern Ireland each (alto- United Kingdom’s third-largest radio group, gether there are 10 national BBC stations), sold its radio business in 2012 to the market including non-English language stations in leader, Global Radio. Meanwhile, there is spec- Wales and Scotland. There are four national ulation that Bauer Radio will be forced to look commercial broadcasting stations, and approx- at further acquisitions in the radio market in imately 300 local or regional commercial broad- order to remain competitive against Global casters, including Global, Bauer, TLRG, UTV, Radio. and GMG. There are 146 community radio Despite the wide availability of other audio- stations in the United Kingdom outside of the visual platforms, radio remains very popular in BBC’s jurisdiction, and not-for profit commun- the United Kingdom. A survey of RAJAR quar- ity groups with either a geographical or special terly listening reports shows that 46.7 million interest focus run them. The BBC network has adults tune in each week. The market share a dominant audience share of 47% and the local of radio via a digital platform stands at 29.1% BBC station account for an additional 9%. The of all radio listening, slightly up from 25% in national commercial broadcasters account for 2010.9
8. Ofcom. “Media Ownership Rules Review Consultation Document.” London: Office of Communications, July 31, 2009. May 18, 2012, 35–40.
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Table 16-4. Radio Groups (Market Shares by Revenue), 1996–2011
1996 2004 2008 2011 Listeners: 2011 (mil ppl)
BBC 48.9 52.9 55.2 54.5 BBC Network Radio1 (b) — 42 46.7 46.6 BBC Radio One (c) — 7.7 9.8 9.8 11.1 BBC Radio Two (d) — 16 16.5 16.5 13.6 BBC Radio Three (e) — 1.4 1.1 1.1 BBC Radio Four (f) — 11.5 12.5 19.4 10.2 BBC Radio Five Live (g) — 4.4 4.5 4.5 6.5 Global Radio UK (UK)2 17.0 16.3 Bauer Radio (Germany)3 10.9 11.7 GMG Radio (Guardian Media Group)4 4.4 4.5 Other 11.7 12.5 13 Total Revenue (mil £)5 1,559 1,581 1,729 Total Revenue (mil US$) 2,853 2,941 2,767 C4 87.5 87.0 HHI 3,474 3,393 N (>1%) 4 4 Noam Index 1,737 1,697
Source: RAJAR. 1 BBC Radio Three is a music station and BBC Radio Four is the dominant UK news and talk show service, and its early morning news sequence is regarded as an agenda setter in UK national politics. BBC Radio One and Two are national pop music stations that have some public service elements. BBC Radio Five Live offers sports, news, and talk show content. 2 Heart Network UK, Classic FM, Capital Network, and Gold UK Network. 3 Magic UK and Kiss UK. 4 Smooth Radio UK and Real Radio UK. 5 This revenue figure is an estimate based on data collected in this study: it is based on average per capita revenues reported for several other countries in this study with similar per capita income.
Broadcast Television launched ITV4, which was targeted at men and broadcast US sports coverage and Hollywood The audience share for terrestrial television films (in 2004, it had introduced the entertain- broadcasting has been declining over the years, ment channel ITV3). In 2006, the terrestrial owing to multichannel development, audience commercial channel Five launched two new fragmentation, and changing audience habits. digital services: Five Life, providing preschool Commercial broadcasters, faced with frag- shows, popular lifestyle shows aimed at women, mentation in audience share and diminishing as well as films and soap operas; and Five USA, advertising revenues, have begun to experi- which offers drama, films, sport, comedy, and ment with new business models and portfolio children’s television content from across the expansion. Atlantic. Meanwhile, the BBC has launched For example, in October 2005 Channel 4 numerous over-the-air digital channels like BBC launched More4, which offered current affairs, Three, BBC Four, BBC News 24, and the children- drama, and comedy programming to the over oriented services CBeebies and CBBC. But apart 35 demographic, while in November 2005, ITV from a few exceptions, these ventures have not
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Table 16-5. TV Broadcasting (Market Shares) 1982–2012
1982 19861 1990 1994 1998 2002 2004 2006 2008 2010 20122
BBC (One & Two) 50.0 48.0 47.0 44.8 44.5 44.3 41.4 41.6 43.6 42.6 50.1 ITV (GMTV) 50.0 44.0 44.0 40.7 34.5 28.4 27,2 26 24.1 25.4 21.8 Channel 4 (S4C) 8.0 9.0 11.5 11.3 11.8 11.6 13 11.1 10 9.8 Five 4.7 7.4 7.9 7.4 7.5 7 3.3 Others (over-the-air)3 3.0 5.0 8.0 10.0 12.0 14.0 15.0 15 Total Revenue (mil £)4 4,446 5,714 7,053 8,136 10,947 Total Revenue 7,381 10,457 13,118 12,611 16,531 (mil US$) C4 100.0 100.0 100.0 97.0 95 91.9 88.9 88.0 86.3 85.0 85 HHI 5,000 4,304 4,226 3,796 3,320 2,963 2,651 2,630 2,661 2,609 3,092 N (>1%) 2 3 3 3 4 4 4 4 4 4 4 Noam Index 3,536 2,485 2,440 2,191 1,660 1,482 1,326 1,315 1,331 1,305 1,546
Source: Broadcasters’ Audience Research Board (BARB). Source: 2012 Ofcom Stakeholders report 2012 updates by editors, with “others” estimated. 1 Shares before 1998 have been rounded to nearest whole number. 2 Affected by Olympic year in London, carried exclusively by BBC. 3 “Others (over-the-air)” include over-the-air channels with a viewing share of ≥ 1.0% (i.e., ITV2, ITV3, ITV4, BBC Three, BBC Four, CBeebies, C4, E4, etc.). 4 This revenue figure is an estimate based on data collected in this study: it is based on average per capita revenues reported for several other countries in this study with similar per capita income.
been successful in winning many new viewers most miss the Internet—more than double the for their networks (Table 16.5). proportion five years ago (8%). For young adults The data show a continuous decline in market aged 16–24, the picture is quite different: 28% shares for the five main terrestrial broadcast- said they would most miss mobile the most, and ers. This can be attributed to the rise of digital 26% said the Internet, an increase from just 18% cable and satellite subscription channels such in 2009. as Sky 1, Sky Sports 1, Sky News, Cartoon Net- work, Nickelodeon, and so forth, which in 2010 Multichannel TV Platforms attracted a cumulative audience share of about 30%. It can also be attributed to the changing Tables 16.6 and 16.7 show the continuing habits of the public, with the young population growth of cable, satellite, and digital terrestrial spending more time watching programs online television (DTT) platforms. It is interesting or on mobile platforms. In 2010 a British adult to note the prominence of DTT, which from a spent on average 242 minutes each day watching mere 4% share in 2000 has since 2011 surpassed TV on a television and this number is increas- satellite and cable to reach 55% of the audience ing, but when people are asked which medium share. This is explained by the popularity of they would miss the most if it were taken away, the BBC-led Freeview DTT platform, which there are clear differences in response by age- is appealing to people who do not wish to sub- group.10 Overall, 44% said they would most miss scribe to digital TV services. A total of up to 40 their television set—a decline of 6 percentage channels are available on Freeview through a points from 2009, while 17% said they would set-top box priced at less than US$50 (£30). The
10. Ofcom. “Communications Market Report.” London: Office of Communications, Aug. 4, 2011. May 18, 2012,
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Table 16-6. Multichannel Video Platforms: Cable MSOs, DBS, IPTV (Market Shares by Revenue), 1992–2011
1992 1996 2000 20041 2008 2011
BSkyB (News Corp., Murdoch 82.2 71.7 52.0 56.5 36.5 33.0 Family, US/AUS) Satellite Subscribers (1,000)2 1,893 3,542 3,963 6,946 8,860 11,012 Virgin Media (US) 17.8 28.3 44.0 26.6 14.0 12.0 Cable Subscribers (1,000) 409 1,399 3,352 3,277 3,406 3,997 BBC Freeview 4.0 16.9 49.5 55.0 DTT Subscribers (1,000) 303 2,075 12,017 18,376 Total Revenue (mil £)3 3,420 5,313 7,434 9,261 Total Revenue (mil US$) 5,164 9,722 13,827 14,818 Total Subscribers (1,000) 2,302 4,941 7,618 12,298 24,283 33,385 C44 – – – – – – HHI 7,078 5,941 4,658 4,185 3,977 4,261 N (>1%) 2 2 3 3 3 3 Noam Index 5,004 42,00 2,689 2,416 2,296 2,460
Source: Author. 1 From 2002, figures include homes with two or more reception capabilities. 2 Satellite and cable figures include homes on both the analog and digital platform. 3 This revenue figure is an estimate based on data collected in this study: it is based on average per capita revenues reported for several other countries in this study with similar per capita income. 4 C4 cannot be calculated since the platforms are fewer than four.
service offers a light but diverse line-up of over- the United Kingdom, which in 2010 had a total the-air services, and it also offers viewers a pack- of approximately 4.8 million cable custom- age including the existing five terrestrial chan- ers (4 million of them with broadband Inter- nels, all the BBC’s digital channels, and some of net services), 4.2 million with fixed-line tele- BSkyB’s channels. In the satellite TV market, phone services, and around 3.1 million mobile BSkyB enjoys a monopoly, having acquired customers. most of the available premium programming for News Corporation has the largest market sports and films, thus leaving little room for new share in the United Kingdom when it comes to market entrants. satellite-delivered programming. The company The launch of Freeview in 2002 altered the retains the lead largely because of the delivery of direction of DTT because it meant that the BBC the premium Sky Sports channels that show live would not seek to compete directly with estab- Premier League as well as Champions League lished satellite and cable offerings. Meanwhile, football matches, which are very popular in digital satellite pay TV platforms—particularly the United Kingdom. However, the audience Sky TV—continued to expand their market share of individual satellite and cable channels shares with the offering of “premium content” remains small compared with the share of the sports and films. traditional terrestrial broadcasting channels, Digital cable, offered by Virgin Media, is a which have also started to build digital port- distant third-place platform for UK audiences. folios. For example, in 2011 the BBC had the Virgin Media operates its own fiber-optic cable largest market share in multichannel homes at network, the only national cable network in 33.2%, followed by ITV at 23.1%, Channel 4 at
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Table 16-7. Combined Video Network Industries: TV Syndicators, Cable Channels, Pay TV (Market Shares by Revenue), 2002–2011
2002 2004 2006 2008 2010 2011
News Corp. Ltd. (Murdoch 34.4 34.4 32.8 32.8 32.8 38.4 Family, US/AUS)1 UK Channel Management 12.8 13.6 14.4 19.2 19.2 16.8 (UK)2 Viacom (US)3 15.2 12.8 16 10.4 8.8 7.2 Discovery (US)4 6.4 7.2 6.8 6.8 8.0 7.2 Turner Broadcasting 5.6 6.4 4.0 4.0 4.0 4.0 (Time Warner, US)5 Walt Disney (US)6 5.6 5.6 5.6 7.2 6.8 6.4 Other 20.0 20.0 20.0 20.0 20.0 20.0 Total Revenue (mil £)7 2,379 3,995 Total Revenue (mil US$) 4,424 6,392
C4 68.4 68 70 69.6 68.8 69.6 HHI 1,675 1,656 1,633 1,667 1,648 1,917 N (>1%) 6 6 6 6 6 6 Noam Index 684 676 667 681 673 783 Total Non-Broadcasters 13.8 15 16.5 14.8 16.0 18.3 Total Broadcasters 86.2 85 83.5 85.2 84 72.7
Source: Broadcasters’ Audience Research Board (BARB). 1 Sky Sports 1, Sky 1, Sky News, Sky Sports 2, Sky Movies Comedy, Sky Movies Action Thriller, etc. 2 Alibi, Home, Good Food, Watch, etc. 3 Nickelodeon, MTV, etc. 4 Animal Planet, Discovery History, Quest, etc. 5 Cartoon Network, Boomerang, etc. 6 Disney Channel, Disney Cinemagic, Disney Junior, etc. 7 This revenue figure is an estimate based on data collected in this study: it is based on average per capita revenues reported for several other countries in this study with similar per capita income.
11.3%, and Channel 5 at 5.9%. These traditional and the Deathly Hallows: Part 1, Alice in Won- broadcasters have launched numerous digital derland, and Inception. The record-breaking channels (for example, BBC3, BBC4, CBBC, Avatar, which was released in late 2009 but ITV2, ITV3, ITV4, E4, Film4, More4, Channel which took home most of its US$146 mil- 5 +1, Five USA, etc.), thus enabling them to get lion (£94 million) in 2010, made a significant a combined total market share of 73.5% in 2011 contribution to putting 20th Century Fox for the multichannel market. in second place in the UK film market. Para- mount was the third highest grossing distribu- Film tor in the United Kingdom that year, with films such as Shrek Forever After, Iron Man 2, Film distributors’ market shares fluctuate and Little Fockers. from year-to-year. The leading distributor in The top 10 distributors had a 94% share 2010, Warner Brothers, saw its market share of the market in 2010, up from 92% in 2009 increase thanks to films such as Harry Potter but down from 96% in 2004. The remaining
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88 distributors handled a total of 379 titles in TELECOMMUNICATIONS MEDIA 2010—62% of the films on release—but gained only a 6% market share. Yet this 6% won by dis- Wireline Telecom tributors outside of the top 10 in 2010 stands as the second highest share for distributors in this The UK telecom market, one of the largest in category since 2004. In the last few years, it has Europe, is characterized by fierce competition ranged from under 3% in 2005 to just below 8% in the mobile and broadband sectors and by an in 2009 (Table 16.8). innovative broadcast sector that has pioneered
Table 16-8. Film Production/Distribution (Market Shares by Box Office %)1 2004–2010
2004 2005 2006 2007 2008 2009 2010
Warner Bros (Time Warner, US) 14.7 18.2 8.2 15.6 11.0 11.2 18.3 20th Century Fox (News Corp., 21st Century 10.7 14.3 20.9 13.9 9.4 16.6 15.9 Fox, Murdoch Family, US/AUS) Paramount (Viacom, US)2 (h) — (i) — (j) — 14.7 16.9 10.8 14.8 Walt Disney (Walt Disney Company, US) 14.5 13.1 15.7 10.7 9.9 12.4 14.0 Universal (Comcast/GE, US) (k) — (l) — (m) — 13.9 18.5 10.5 10.2 Sony Pictures (Sony, Japan) 10.0 6.8 16.1 8.2 12.5 11.3 6.9 eOne Films (Entertainment One Ltd., (n) — (o) — (p) — — — 4.9 5.5 Canada/US) Lions Gate (Lions Gate Entertainment 1.0 0.3 2.4 2.3 2.5 2.9 3.5 Corporation, US) Entertainment (Nigel Green; Entertainment 7.9 9.4 7.9 9.5 8.0 8.6 2.5 Film Distributors, UK) Optimum (Vivendi, France) 2.2 Pathé (Pathé Brothers, France) 2.8 3.4 3.2 1.3 2.1 2.9 Momentum (Alliance Films, UK) 2.2 1.9 2.3 3.4 3.5 UIP 29.8 29.1 18.9 Top Ten Total 3 96.1 97.3 96.4 94.5 94.5 92.2 93.7 Others 3.9 2.7 3.6 5.5 5.5 7.8 6.3 Total Revenue (mil £)4 902 943 1,140 Total Revenue (mil US$) 1,651 1,753 1,767 C4 69.7 74.7 71.6 58.1 57.8 51.5 63 HHI 1,605 1,704 1,451 1,136 1,178 1,024 1,208 N (>1%) 9 8 9 10 10 10 10 Noam Index 535 602 483 359 373 323 382
Source: Author; BFI Statistical Yearbook 2011. 1 The British Film Institute (BFI) Statistical Yearbook publishes information on film distributors and exhibitors in the United Kingdom. While the Statistical Yearbook does not publish any data on exhibitors’ market shares, in terms of share of box office, it does publish information on distributors’ market shares (in terms of total box office receipts). 2 Until 2006, Paramount and Universal distributed jointly as UIP. 3 “Top Ten Total” refers to the top 10 distributors of that particular year. 4 This revenue figure is an estimate based on data collected in this study: it is based on average per capita revenues reported for several other countries in this study with similar per capita income.
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business models for digital distribution. As a agreement with Sir Richard Branson’s Virgin consequence, mobile and broadband penetra- Group Limited to license out all the relevant tion is well ahead of the EU average, while com- Virgin sub-brands for a term of 30 years, with a petition in the wireline sector is driving prices 10-year opt-out clause. Branson accepted a mix down for UK consumers. Mobile communica- of shares and cash, making him a 10.7% share- tions’ share of total telecoms revenue has, as of holder of the combined company at the time. 2004, been larger than that of fixed lines, and However, now that it is listed on NASDAQ and DSL is now almost universal in the country, the London Stock Exchange, Sir Richard Bran- while Internet coverage (both at work and at son’s Virgin Entertainment Investment Hold- home) has reached 79.8% of the population.11 ings stake has fallen to 5.5% (Table 16.9).12 Digital television is universal as digital switcho- ver occurred in December 2012, and digital radio Wireless Telecom (DAB) is beginning to make inroads. Consumer prices across the board have fallen steadily, while In contrast to the UK wireline telecom market, network capabilities have been greatly expanded which has been characterized by a BT monopoly, following recent investments by British Telecom the UK’s wireless telecom market has been much (BT) and Virgin Media in Next Generation Net- more competitive. Outside of the new 3G opera- work (NGN) infrastructure. To comprehend the tor, 3UK, before 2010 the other four operators— enormity of the developments one should bear O2, Vodafone, T-Mobile, and Orange—had in mind that in the 1990s, most UK households roughly equivalent market shares. However, only had access to a basic landline, five TV chan- concentration rose when Orange and T-Mobile nels, and their radio service on a set. merged in 2010 under a new company named British Telecom (BT) dominates wireline Everything Everywhere (EE), owned jointly services, but it is losing market share. Although (50:50) by Deutsche Telekom and France Tele- historically the telecom sector in the United com (Table 16.10). Kingdom has been driven by growth in basic A 2011 report by Ofcom highlights some of fixed telephone services, growth has become the key trends emerging in 2011 regarding both concentrated more recently in broadband and the wireline and wireless sectors.13 In particular, mobile. The decline in traditional fixed tele- BT’s share of total fixed and mobile voice call phone market represents a business challenge to volumes fell to 19.4% in 2010, while mobile’s BT, which in the past has relied on those services share increased to 49.2%, making it likely that as its most stable revenue stream. BT’s market more than half of UK voice calls will come from revenue for all fixed call volumes fell from mobile platforms in the next few years. BT’s US$10.7 billion (£5.9 billion) in 2005 to US$6.5 share of fixed voice call volumes also fell to billion (£4.2 billion) in 2010. In the same period, under 40% for the first time in 2011. Meanwhile, BT’s market share fell from 64% to just above total fixed Internet revenues were US$4.7 billion 50%, whereas the market shares of Virgin Media (£3 billion) in 2010, down from US$5 billion and other wireline telecom firms have increased. (£3.2 billion) in 2009. This decline was primar- Virgin Media provides quadruple services— ily the result of falling residential broadband fixed and mobile telephone, television, and prices. In addition, the decline in the number broadband Internet—to UK consumers. In of fixed lines for businesses accelerated in 2010, 2006, Virgin Media entered into a licensing falling by 5.2% (Table 16.11).
11. Internet World Stats. “United Kingdom: Internet Usage Stats and Market Report—Usage and Population Statistics.” Inter- net World Stats, n.d. March 30, 2012.
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Table 16-9. Wireline Telecom (Market Shares By Revenue)1 2005–2012
2005 2006 2007 2008 2009 2010 2012
British Telecom (BT) 64.0 61.0 60.0 58.0 55.0 51.0 43,8 Virgin Media 13.0 12.0 12.0 11.0 12.0 12.0 14.6 British Sky Broadcasting 12.7 Group PLC Others2 23.0 27.0 28.0 31.0 33.0 37.0 29.0 Total Revenue (bil £) 10,834 10,865 11,662 10,655 8,582 8,178 8,500 Total Revenue (bil US$) 19,718 19,992 23,324 19,819 13,474 12,676 13.469 C4 77 73 72 69 67 63 71.1 HHI 4,283 3,933 3,749 3,540 3,196 2,772 2,293 N (>1%) 2 2 2 2 2 2 3 Noam Index 3,029 2,781 2,651 2,503 2,260 1,960 1,324
Source: Ofcom, 2011 Source: Ofcom, 2013 report for 2012 numbers 2012 updates by editors 1 Includes estimates where Ofcom does not receive data from operators; excludes revenues from NTS voice calls. 2 “Others” includes Talk-Talk, Sky Talk, O2, Tiscali, Post Office, Orange, Pipex Home Call, Kingston Communications, Tesco Home Phone and Vodafone. Bainbridge, Jane. “Sector Insight: Fixed-line telecoms.” Brand Republic, May 20, 2011. July 14, 2012.
Table 16-10. Wireless Telecom (Market Shares By Revenue), 2005–2012
2005 2008 2010 2012
O2 (Telefónica, Spain) 22.0 25.2 28.0 29.0 Vodafone 21.5 25.4 23.0 28.0 Everything Everywhere (EE) 0.0 0.0 43.0 34.0 T-Mobile (Deutsch Telekom, Germany) 16.5 20.0 Orange (France Telecom, France) 17.0 25.0 3UK 2.3 4.5 6.0 9.0 Others 20.7 0.0 0.0 0.0 Total Revenue (mil £)1 13,714 18,898 21,219 19,570 Total Revenue (mil US$) 24,960 35,151 32,890 32,210 C4 77.0 95.6 100.0 100 HHI 1,513 2,325 3,198 2,862 N (>1%) 5 5 4 4 Noam Index 677 1,040 1,599 1,431
Source: Ofcom, 2010; 2011, 2012. 2012 update provided by editors. 1 This revenue figure is an estimate based on data collected in this study: it is based on average per capita revenues reported for several other countries in this study with similar per capita income.
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1 Table 16-11. Total UK Wireline & Wireless Telecom (Market Shares by %) 2005–2012 AQ1
2005 2006 2007 2008 2009 2010 2012
3UK Mobile 3.5 3.6 3.7 4.1 4.3 4.9 6.3 Everything Everywhere (EE) 30.0 30.9 30.5 29.9 29.8 27.2 24.0 Orange (France Telecom, 14.8 14.7 14.5 14.8 14.8 France) T-Mobile (Deutsch Telekom, 15.2 16.2 16.0 15.1 15.0 Germany) O2 Mobile (Telefónica, Spain) 16.9 18.2 18.5 19.3 19.6 21.2 20.4 Vodafone Mobile 15.1 14.3 15.5 15.9 16.5 17.5 19.7 Virgin Media (fixed) 4.9 4.5 4.2 4.3 4.2 4.3 4.3 British Telecom (BT) (fixed) 26.2 23.1 21.2 19.2 16.5 14.9 13.8 British Sky Broadcasting 3.7 (fixed) Others (fixed)2 3.6 5.4 6.4 7.3 9.2 10.0 8.6 C4 73.4 72.2 71.2 69.5 67.6 80.8 77.9 HHI 1,699 1,610 1,570 1,530 1,493 1,860 1,851 N (>1%) 8 8 8 8 8 7 7 Noam Index 600.8 569.3 555.3 540.8 528.0 703.0 702
Source: Ofcom, 2011. 1 Includes estimates where Ofcom does not receive data from operators. MVNOs and mobile service provider connections are included within the network operator figures. 2 “Others (fixed)” includes carrier preselection and wholesale line rental in addition to other licensed operators.
INTERNET MEDIA Search Engines Internet Service Providers (ISPs) In terms of market share, Google dominates this sector, as it does in most other highly indus- In the past few decades, ISPs have gone through trialized countries. But in the United King- numerous mergers and acquisitions. However, dom, Google’s market share is even stronger there are currently a fair number of ISPs on the than it is in the United States, where it origi- market, and the competition between them has nated: it controlled 90.7% of all UK web traf- reduced prices substantially. UK users can now fic in January 2011.14 In a very distant second buy high-speed broadband packages (up to 50 MB and third place are Bing (formerly MSN) and of broadband) combined with other services for Yahoo!, both of which are losing market share under US$16 (10£) per month (Table 16.12). (Table 16.13).
14. Logan, Stephen. “Search Engine Market Share Statistics—November 2009.” Koozai, Nov. 18, 2009. June 3, 2012.
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Table 16-12. Internet Service Providers (Market Shares by Revenue) 2004–2012
2004 2006 2009 2012
British Telecom (BT) Broadband 27.2 23.1 25.8 29.6 Virgin Media 21.4 26.3 21.8 20.8 Carphone Warehouse (UK)1 18.6 22.2 25.2 — Talk-Talk (UK)2,3 7.5 10.1 10.0 17.0 Sky Broadband (News Corp., — — 11.0 19.4 Murdoch Family, US/UK/AUS)4 Orange (France Telecom, France) 9.3 9.2 5.75 3.0 Cable and Wireless Worldwide (UK)5 1.5 1.2 — — Others 22.0 18.0 10.5 8.0 Total Revenue (mil £)6 3,822 4,832 7,070 7,300 Total Revenue (mil US$) 6,994 8,890 11,100 11,563 C4 76.5 80.8 83.8 86.8 HHI 1,633 1,804 1,930 1,983 N (>1%) 5 5 5 5 Noam Index 730 807 863 887
Source: Ofcom, 2010 Source Ofcom, 2013 for 2012. 2012 updates provided by editors. 1 Includes AOL. 2 Includes Tiscali. 3 Talk-Talk was a subsidiary of Carphone Warehouse until 2010 when Carphone demerged their telecom business. http://www. reuters.com/article/2010/03/29/us-best-buy-carphone-idUSTRE62S1OK20100329. 4 News International operates as an ISP through Sky Broadband, which was founded in 2006. The first available market share was in 2007—which is why Sky’s market share in 2004 was 0%, but went up to 11% in 2009. 5 In 2010, Cable & Wireless PLC became Cable & Wireless Worldwide and in June 2012 Vodafone acquired the UK-based company. 6 This revenue figure is an estimate based on data collected in this study: it is based on average per capita revenues reported for several other countries in this study with similar per capita income.
Online News new readers abroad. Overall traffic for estab- lished news sites run by the BBC, News Inter- Established newspapers and television broad- national, and ITV has shown a slight decline in casters dominate the online news media sector, recent years, owing to competition abroad in the leaving little room for newcomers. Despite English-language news market (Table 16.14). the lead the BBC has here, newspapers also have large online market shares. Over the past CONCLUSION decade, there has been a fast-growing online market worldwide, attracting even larger audi- In 2009, Ofcom submitted a set of recommen- ences from outside the United Kingdom. News dations to the UK Secretary of State concerning websites have seen a decline in domestic read- local media ownership rules, which were even- ership, but they have compensated by winning tually approved.15
15. Ofcom. “Media Ownership Rules Review Consultation Document.” London: Office of Communications, July 31, 2009. May 18, 2012, 35–40.
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Table 16-13. Internet Search Engines (Market Shares by Revenue), 2007–2011
2007 2009 2011
Google (US) 77.0 88.7 90.7 Yahoo! (US) 8.0 5.5 2.9 MSN (US) 5.0 — — Bing (US) — 2.9 3.9 Ask (US) 5.0 — 1.3 Others 5.0 2.9 1.3 Total Revenue (mil £)1 375 1,311 1,406 Total Revenue (mil US$) 750 2,058 2,250 C4 95.0 97.1 98.7 HHI 6,043 7,914 8,248 N (>1%) 5 4 5 Noam Index 2,703 3,956 3,689
Source: Intraspin.com, 2007; Koozai, 2009; 2011. 1 This revenue figure is an estimate based on data collected in this study: it is based on average per capita revenues reported for several other countries in this study with similar per capita income.
The recommendations consisted mostly of Despite the rise of the Internet and the growth relaxing and simplifying the radio ownership of digital media as a news source, TV remains rules and abolishing most of the local rules an important source of news, and newspapers concerning radio and cross-media ownership. retain an important role in setting the news Ofcom’s rationale was that given the financial agenda. Ofcom concluded that there have not yet pressures that radio stations face, relaxing regu- been such significant changes in the solvency of lations may provide opportunities to make them national media outlets to warrant a relaxation of more viable by letting them go under common the anticoncentration measures here. ownership. Ofcom further justified this posi- Ofcom further recommended retaining the tion by reporting that a majority of consumers restrictions on withholding broadcast licenses are not opposed to single ownership in radio, in order to continue protecting consumers so long as they have an alternative source from against undue influence through television and their local BBC station. radio by certain owners (i.e., political parties Ofcom also recommended greater liberaliza- and religious groups). tion of local cross-media ownership rules, so that Ofcom has suggested retaining the appointed the only restriction would be on ownership of news provider rule as well, which aims to ensure three media sources at the same time: local news- that the provision of national and international papers (with 50% plus local market share), a local news to ITV plc is independent of the BBC. radio station, and the regional Channel 3 license This is because ITV1 remains the most watched were set as the maximum concentration limits. source of broadcast news after the BBC, exactly Meanwhile, Ofcom advised the government to as it was when the rules were liberalized with the retain the national cross-media ownership rules. Communications Act (2003).16
16. “No. 1900 (C. 77) Communications Act 2003.” London: The National Archives, July 21, 2003. Mar. 2, 2012.
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Table 16-14. Online News Media (Market Shares by Revenue), 2007–2011
2007 2009 2011
BBC (public) 35.0 34.0 32.0 News International (News Corp., Murdoch Family, 19.2 19.0 18.0 UK/US/AUS)1 ITV (ITV plc) 9.0 8.5 8.0 Guardian.co.uk (Guardian Media Group) 7.5 7.0 7.0 Mail Online (Daily Mail & General Trust) 6.0 6.0 6.1 Channel 4 (Channel Four Television Corporation) 4.0 4.0 4.0 Mirror Group Digital (Trinity Mirror plc) 2.2 2.0 1.8 Telegraph Group (Barclay Brothers) 1.8 1.8 1.7 Independent.co.uk (Independent Print Ltd, Alexander 0.9 0.8 0.8 Lebedev) Others 14.4 16.9 20.6 Total Revenue (mil £)2 375 656 956 Total Revenue (mil US$) 750 1,030 1,530 C4 70.7 68.5 65.0 HHI 1,829 1,736 1,559 N (>1%) 8 8 8 Noam Index 647 614 551
Source: Author, Audit Bureau of Circulations Electronic. 1 Skynews.com, The Sun Online, and Times Online. 2 This revenue figure is an estimate based on data collected in this study: it is based on average per capita revenues reported for several other countries in this study with similar per capita income.
With regard to the broadcasting market, long shaped British television. This is evidenced the British public has been well served by the by the establishment of the Content Board, a mixed economy of a public broadcaster, a regu- committee of the main Ofcom Board, which will lated private sector, and the arrival of satellite serve as Ofcom’s primary forum for the regula- and cable broadcasters.17 The television market tion of quality and standards in the broadcasting is among the most mature and dynamic in the industry. Support for public service principles is European Union (EU), consisting of traditional also evidenced by the government’s continued broadcasters with public service obligations support for the BBC in an increasingly crowded that offer high-quality, diverse programs that marketplace, though it has asked BBC to cut are universally accessible, as well as digital ter- back services and licensing fees. However, inde- restrial, cable, and satellite channels. Despite pendent media critics will continue to argue the shift toward a more deregulated commer- that technological and regulatory changes have cial broadcast market, there is a determination affected the emphasis and character of the pro- to retain the public service principles that have gramming of both public and private terrestrial
17. Iosifidis, Petros. Public Television in the Digital Era: Technological Challenges and New Strategies for Europe. 2nd ed. Basing- stoke: Palgrave Macmillan, 2012, 143–163.
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channels, which now provide less pluralistic, less are signs that the UK government may adopt a distinctive, and less diverse output. tougher line toward News International in the Satellite and cable television channels are wake of “Hackgate.” also more widely available, but they are not sub- ject to public service obligations. BSkyB, set up in 1990, dominates the satellite TV market with Bibliography more than 12 million subscribers. The cable TV market developed in the late 1980s with the 1. Books and Articles entry of numerous networks, but in 2006 only Bainbridge, Jane. “Sector Insight: Fixed-line two providers had prevailed, NTL and Telewest, telecoms.” Brand Republic, May 20, 2011. July 14, who then merged into Virgin Media. A further 2012.
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14 July 2012.
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United Kingdom—Data Summaries
Eli Noam and Paul Mutter
MEDIA CONCENTRATION IN THE United active and expansionary of these foreign-owned Kingdom is among the lowest in the world. firms. News Corp. is also the major newspaper Weighted Average HHI, while high in an anti- firm. Its controlling owner, Rupert Murdoch, trust sense, were low compared to other coun- moved first to London from his native Australia tries, at 2,871. However, it has grown in recent and created a significant print and political pres- years (Table 16.15). ence. He then moved control of the company Public ownership of media in the United to New York. Following public controversies, Kingdom is relatively low, at 9.7%, mostly News Corp. split itself in 2013 into News Corp. through the BBC. The BBC accounts for 50% and 21st Century Fox. These two firms had 8.1% of TV broadcasting, 10% of magazines, 55% of and 11.5% share of content, respectively. 21st radio, and 32% of online news media, making it Century Fox is the third-largest media company one of the most diverse content media compa- in the United Kingdom based on Sky, which it nies in the United Kingdom. Of the companies controls (Table 16.16). solely involved in content media, it is the largest Traditionally, UK media companies have by overall national market share with 9.7%, and a significant international role: Pearson is it holds 20.8% of content (Table 16.16). a major print publisher; Vodafone (United Since the 1980s, a relaxation on foreign Kingdom) is the second largest mobile opera- direct investment has led to an increase in for- tor in the world, with over 440 million sub- eign ownership of national media industries scribers and large market share of the mobile (52.1% of all properties are foreign owned). markets in many countries. Vodafone’s global Murdoch’s 21st Century Fox (US) is the most size is vastly greater than its UK presence.
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a a re e all all edi g ver y Sha y (%) era al M al n O e a Av h rket t tion
omp ual C of Na Ma 0.17 0.9 –0.1 –0.9 –0.13 1.3 0.03 –0.6 0.06 –0.7 –0.1 0.3 –0.05 0.3 0.01 0.3 –0.02 0.9 0.16 –0.02
x x Ann y
e y y nde n ng I a ountr C omp ower in % Cha N/A C P 11.5 –10.3 –14.3 N/A –2.1 –14.3 12.9 –8.1 12.5 –6.4 3.2 11.9 –3.6 N/A 35.4 0.8
a a re all all edi ver y Sha y (%) al M al n O t e a n h rket t e tion
c omp e C of Na 1.2 16.4 Ma 0.7 7.5 0.0 9.1 3.0 0 1.8 0.0 1.1 7.5 0.7 9.7 0.9 7.2 0.4 6.5 1.6 1.6 R
x x y
y y nde n I a ountr C omp ower 2011 or Most in 300.4 810.6 C P 4.0 288.9 0.0 299.9 63.9 0 42.2 0.0 16.3 217.6 9.5 431.6 13.0 202.8 5.9 142.4 148.7 33.4
a a re all all edi nited Kingdom U ver y Sha y (%) al M al n O e a h rket t tion
omp C of Na 0.0 10.5 Ma 1.6 13.9 0.9 0.0 2.8 4.0 1.3 4.7 1.9 5.3 1.0 7.3 0.8 5.2 0.5 0.0 0.6 1.7
x x y
y y nde n I a ountr C omp ower 2004/5 in 0.0 448.6 C P 14.4 825.6 14.2 0.0 74.9 65.3 22.1 75.1 37.6 116.1 17.1 287.1 10.6 110.8 7.9 0.0 42.7 31.8 1 EE (T-Mobile, GermanyEE (T-Mobile, + Orange) (France) Germany) (Germany/UK) able 16-15. Nationalable 16-15. Media Industries Concentration in the Murdoch T Pearson (UK) BT Group Bertelsmann (Germany)
ITV T-Mobile (Deutsche T-Mobile Telekom, Bauer (Germany) Bauer Orange (France Telecom, France) Telecom, (France Orange Trinity Mirror plc Telefónica (O2, Spain)Telefónica (O2, Lagardère (France) BBC (public) Hearst (US) Vodafone Total GlobalTotal Radio Liberty (US) Google (US) Daily Mail and General Trust Penguin Random House
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16-Noam-Chap16.indd 446 07/01/15 8:00 AM OUP-FIRST UNCORRECTED PROOF, January 7, 2015 –0.9 –0.02 0.05 –0.01 –0.16 –0.001 –0.01 –0.007 –0.05 –14.3 –0.7 % Change Annual Average –1.43 2.0% 0.4% –8.2 1.0% –11.4 0.3% 2.6% –2.4 1.2% –4.4 1.5% –4.5 0.0% 3.5% 0.6% 4.6% 2.8 1.3% 2.7% 0.0 1.4 1.1 0.1 0.5 0.5 0.4 0.2 1.0 0.0 13.0 2011 or Most Recent2011 7.4 124,510 67 0.68 46 5.6 9.7 4.9 52.1 1.5 85.2 1.0 2,871 12.1 41.6 1,242 42.7 689 123 71 2,888 6.4 1.2 0.8 0.2 1.5 0.5 0.5 0.3 1.3 129.4 13.6 2004/5 8.2 104,098 65 1.6 43 27.4 7.3 5.5 33.7 1.8 76.7 1.3 2,597 17.5 37.7 1,000 38.2 520 103 61.9 2,429 ) n 2 ) n Book publishing only. Bought out by Liberty in 2013. 1 2 Industry (mil US$) Nat’l Media Industry (%) (Pooled C10) Channel 4 Media Concentration Index Viacom (US) Total Revenue:Total Nat’l Media Sony (Japan) Total Voices ( Voices Total ( Net Voices Time Warner (US) Public Ownership (%) Disney (US) Foreign Ownership (%) The Guardian C4 Average—Weighted Condé Nast (Advance, US) HHI Average—Weighted Northern & Shell C1 Average—Weighted C1 Virgin Media Virgin Noam Index Average—Weighted Pooled Overall Sector C4 Pooled Overall Sector HHI Pooled Overall Sector Noam Index Market Companies: Share Ten of Top National Power Index
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al al a a e re g edi tion M era y Sha y (%) n Na Av e a h rket t
ontent omp ual C Ma C of 0.14 0.38 0.3 0.6 –0.3 0.1 0.3 –0.3 –0.3 –0.07 0.4 –0.1 0.01 –0.1 –0.04
x x Ann y
e y y nde n ng I a ountr C omp ower in C P % Cha 5.2 N/A N/A 6.5 –10.5 11.5 32.8 –14.3 –8.4 –0.05 N/A –5.0 –2.8 –6.8 –4.2
al al a a re edi tion M y Sha y (%) n Na t e a n h e rket t
c omp ontent e C of C Ma 16.7 2.6 2.1 20.8 1.4 3.8 3.5 0.0 2.4 3.5 2.7 2.0 6.4 1.5 0.8 R
x x y
y y nde n I a ountr C omp ower in C P 769.5 2011 or Most 65.3 56.1 926.4 8.7 90.6 319.1 0.0 35.0 71.8 60.2 25.9 137.1 20.3 12.7
al al a a re edi tion M y Sha y (%) n Na e a h rket t
omp ontent C of C Ma 15.7 0.0 0.0 16.7 3.6 3.1 1.3 2.1 4.3 3.9 0.0 2.9 6.3 2.3 1.1
nited Kingdom x x U y
y y nde n I a ountr C omp ower 564.3 2004/5 in 0.0 0.0 637.3 C P 32.6 50.2 96.9 32.2 85.3 72.1 0.0 39.8 169.8 38.8 18.0 1 op Content Media Companies in the T 2 able 16-16. Murdoch Interests (US) T BBC (public) Pearson (UK) (Germany) Bauer Google (US) Bertelsmann (Germany) Trinity Mirror Daily Mail and General Trust Time Inc. (US) Northern & Shell ITV Liberty (US) Lagardere (France) Penguin Random House (Germany/UK) Total GlobalTotal Radio
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16-Noam-Chap16.indd 448 07/01/15 8:00 AM OUP-FIRST UNCORRECTED PROOF, January 7, 2015 0.01 –0.3 –0.02 –14.3 % Change Annual Average 0.59% 0.74% 0.5% 3.1% 1% 4.5% 2.4 0.0 15.9 0.0 2011 or Most Recent2011 20.8 40.9 77.7 2,674 43 2,711 1.7 1.9 18.7 49.8 2004/5 16.7 35.7 74.2 2,201 34 2,061 Book publishing only. Liberty bought out Virgin Media in 2013. 1 2 Viacom (US) Virgin Media Virgin Media Concentration Index Public Ownership (%) Foreign Ownership (%) C4 Average—Weighted HHI Average—Weighted C1 Average—Weighted C1 National Power Index
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Table 16-17. Top Platform Media Companies in the United Kingdom
2004/5 2009 or Most Recent % Change Annual Average
Company Company Share Company Company Share Company Company Share Power Index of the National Power Index of the National Power Index of the National in Country Platform Media in Country Platform Media in Country Platform Media Market (%) Market (%) Market (%)
BT Group 1,477 25.0 540.9 14.0 –9.1 –1.6 Everything Everywhere 0.0 0.0 561.4 17.0 N/A 2.4 (T-Mobile & Orange) Orange (France Telecom, 134.4 8.4 0.0 0.0 –14.3 –1.2 France) T-Mobile (Deutsche Telekom, 116.8 7.1 N/A 0.0 –14.3 –1.0 Germany) Murdoch Group (Sky, 21st 357.4 6.3 846.5 16.2 19.6 1.4 Century Fox, US) Telefónica (O2, Spain) 207.6 9.4 407.3 14.0 13.7 0.7 Vodafone 198.3 9.2 379.7 13.6 13.1 0.6 Liberty (US) 0.0 0.0 217.7 10.3 N/A 1.5 OUP-FIRST UNCORRECTEDPROOF,January7,2015 Hutchison Whampoa 2.3 1.0 39.2 4.4 232.7 0.5 (3G, Hong Kong) Virgin Media1 192.1 10.0 0.0 0.0 –1.4 Media Concentration Index 2004/5 2011 or Most Recent % Change Annual Average Public Ownership (%) 0.0 0.0 0.0% Foreign Ownership (%) 32.2 61.8 4.2% C4 Average—Weighted 78.6 91.9 1.9% HHI Average—Weighted 2,910 3,043 0.7% C1 Average—Weighted 41 41 0.0% National Power Index 2,722 3,043 1.7% 07/01/15 8:00 AM 1 Bought out by Liberty in 2013; Liberty’s figures reflect this sale. OUP-FIRST UNCORRECTED PROOF, January 7, 2015
At the same time, the UK wireless market shares of both companies would be individu- has significant foreign ownership through ally if they were not operating in platforms T-Mobile (Germany) and Orange (France), such as this 50:50 joint venture. The Virgin now operating jointly as Everything Every- Media/Liberty deal of 2013 is reflected, with where (EE), which holds 9.1% of the national Virgin Media’s markets shares transferred to market. Table 16.17 shows what the market Liberty for the latest year.
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Chapter 16
Q. No. Query
AQ1 Please check whether table footnotes have been correctly indicated in table 16.11.
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